Iraqi security forces are now capable of policing the entire south of their country without British help, senior defence and Foreign Office officials said yesterday.

Only Iraqis can resolve continuing violence, including the murder of women for refusing to comply with Islamic dress code and cultural practices, they added.

Officials painted an optimistic picture - including a dramatic fall in political violence by insurgents and Shia militia - ahead of tomorrow's handover of responsibility for security throughout Basra province.

They confirmed that British commanders have been talking to members of the radical cleric Moqtada al Sadr's Mahdi army, and other Shia militia as part of a "reconcilation process". The British army has released 39 detainees, including militia members, since September and now hold just 23.

British officials said the militia had decided to abandon the insurgency and join the political process. "There is not the level of violence there but competition for political influence", a diplomatic source said.

Officials said the handover of responsibility for security to Iraqis in Basra province - the last of four Iraqi provinces controlled by Britain - had "concentrated minds". They said the Iraqis were confident they could handle their responsibility.

The number of British troopswill be reduced to about 4,500 by the end of the year - from about 5,500 in the summer. It is due to be reduced to 2,500 next spring.

That would be enough to help the Iraqis in the event of resurgence of violence, a senior defence official said. He said two battlegroups, a total of 1,200 troops, would still be available to help if necessary. A further 500 British troops will be based in Kuwait to help run supply lines.

British officials are putting their faith in two Iraqi generals recently sent to Basra by the Baghdad government. They are Mohan al-Firaiji, in charge of security in Basra, and Jalil Khalaf, the police chief. They have been instrumental in persuading Shia militia to stop attacking the British. However, Jalil has expressed concern about continuing violence.

The British government has made clear it is sensitive to the charge that it is "walking away" from Basra to devote more military resources to Afghanistan. Officials said there were now about 30,000 Iraqi soldiers and police in Basra, two thirds of them trained by British troops.

British soldiers would continue to train and mentor Iraqi forces, officials said.

The decision to keep a sizeable British force in Basra is partly because the US wants to keep them there for political and security reasons, defence sources said.